With consumers pessimistic about the current state of the economy and the future, U.S. consumer confidence fell 32.4% in February from a month earlier, according to the RBC Consumer Attitudes and Spending by Household Index.
According to the monthly index, which was released Thursday, economic attitudes soured across the board, with consumers viewing the current economy negatively and displaying increased pessimism about the future.
As a result, the RBC Index for February 2010 stands at 39.4, down 18.9 points from January’s reading.
“Although numerous economic indicators are trending in a favorable direction, it’s evident that ‘less-bad’ is just not good enough for U.S. consumers,” said Tom Porcelli, an economist for RBC Capital Markets. “This month’s reading suggests that consumers continue to feel financial pressure from recent volatility in stocks and a soft job market.”
The “CASH” Index is a survey of 1,000 people conducted from Jan. 28 to Feb. 1. It is comprised of four sub-indices: RBC Current Conditions Index; RBC Expectations Index; RBC Investment Index and RBC Jobs Index. The Index is benchmarked to a baseline of 100 assigned at its introduction in January 2002.
Confidence in current conditions deteriorated sharply during the past month, as seen in the RBC Current Conditions Index, which stands at 30.5, a decline from January’s level of 51.6. Currently, 46% of individuals surveyed rate their local economy as weak, up from 40% in January.
Confidence in the future fell as the RBC Expectations Index declined nearly 20 points this month to 48, from 67.6 a month earlier. Currently, only 34% expect their local economy to be stronger six months from now, down from 38% last month.
This month also found that 13% of Americans expect their personal finances to be weaker six months from now, compared to 11% in January.
Although it fell less than the other sub-indices, the RBC Jobs Index saw a drop of 13 points in February to 54.9 from a month earlier. According to the survey, 67% said that they or someone in their close circle have lost their job in the past six months, up from 62% in January. In addition, only 29% are confident they or someone in their circle will not lose their job in the next six months, down from 37% in January.
Consumers’ confidence in the investment climate also soured, resulting in a 17.3 point drop from the previous month in the RBC Investment Index to 40.8. The number of consumers who say they are less confident investing for the future has risen to 57%, up from 54% last month.
Interestingly, confidence among affluent investors increased slightly this month, according to a monthly survey that was released late last month. According to Spectrem Group, a Chicago-research firm, its millionaire investor confidence index rose one point to negative-nine. This represents the index’s sixth-straight neutral reading and follows a six-point decline in December.